Traditionally, when wagering on the outcome of gaming events or playing lottery games, a buyer must go to the gaming agency itself (such as a race track) or to a governmentally authorized site (such as OTB aka Off Track Betting) or to a lottery retailer. The buyer completes a game card or communicates to the sales agent the (alpha) numeric sequence(s) he or she wishes to play, and pays the sales agent the wager. The sales agent enters the selections into either an on-site or on-line terminal that is connected to the gaming or lottery's processing system. The chosen (alpha) numeric sequence is recorded, and then a coded physical/bearer claim ticket with the details of the (alpha) numeric sequence is instantaneously issued and printed. The physical/bearer ticket is handed over to the buyer, and the buyer takes possession of the ticket. The gaming or lottery agency recognizes the actual physical/bearer ticket as the sole form of legal claim to any winnings or prizes, with one exception.
The exception is when the buyer enters into a subscription arrangement with a lottery agency in which the buyer subscribes to the same (alpha) numeric sequence for a fixed number of future drawings. In this instance, the buyer must complete an application form detailing personal information and submit the application and payment to the agency. The lottery agency records the subscription into its system and issues an official acknowledgement to the subscriber of the (alpha) numeric sequence, the subscription period and number of future drawings. The personal information is recorded in the lottery agency's database.
The subscription agreement is the sole exception where a gaming or lottery agency does not issue a physical ticket, but has a recognized potential legal claim. However, the subscription process generates very low sales volume for the sponsors because of the inconvenience of the enrollment process and the lack of flexibility offered to the buyer.
At present, numerous Internet sites offer wagering through virtual casinos, private or offshore lottery drawings and interactive games. However, in the United States, no federal, state or local government or agency has offered wagering, gaming or playing the lottery via the Internet. One reason for this is that changing the current bearer ticket environment into a bearer ticket and ticket-less environment requires a major process change, and a major systems rewrite (“process” change). Another reason is that a widespread ticket-less process invites significant fraud, legal and logistical exposure (“risk” change) to the sponsoring entity. Many proposals have been made regarding new systems and methods that require the sponsoring entity to adopt a major “process” and/or “risk” change to accommodate the Internet as a distribution channel. To date, in the United States, no federal, state or local government or agency has adopted or embraced any change for its gaming or lottery system from the current physical/bearer ticket process (excluding subscriptions), which by its very nature is Internet unfriendly.
The example system and method described herein do not require the sponsoring entity to adopt a major “process” and/or “risk” change to accommodate the Internet as a distribution channel. The government's (and/or its agent's) interest is satisfied while a buyer's legal claim to physical/bearer tickets for transactions initiated over the Internet is safeguarded. In the disclosed example system and method, the actual physical/bearer ticket is in the physical possession of a custodian/safekeeper, and the custodian/safekeeper maintains custody of the ticket on behalf of the buyer. The introduction of an independent third party custodian/safekeeper to hold in custody the physical bearer ticket avoids potential conflicts of interest between buyer and seller, and remedies the risk concerns of the governmental sponsors.
An example system and method are described below which facilitate a buyer's perfection of his/her/their security interest to physical/bearer game tickets, purchased and issued from a seller (e.g., an authorized sales agent of a gaming and/or lottery agency) through the use of an independent custodian. This makes the purchase of gaming and lottery tickets viable when and where the initiation of the transaction is over a communication path like the Internet. No substantial modification to the present gaming or lottery systems that issue physical bearer tickets is required—the system and method described herein may be provided as an add-on to existing gaming or lottery systems.
The example security interest perfection system and method described herein includes three aspects: a communication network, a physical back office operation, and contractual custodial/safekeeping agreements. This is referred to herein as the “clicks,” “bricks” and “sticks” framework. The first framework is systems or “clicks” and encompasses an open-ended architecture for a plurality of buyers using the Internet to purchase gaming or lottery tickets and to receive confirmation of such purchases; their Internet Service Provider; and a designated sales agent system which includes web servers, firewalls, security, authentication and authorization systems, and host machines structured in a distributed computing environment. The second framework is a physical processing mechanism or “bricks” in which on line gaming and/or lottery systems generate actual physical/bearer tickets and are safekept, and where all relevant information of those tickets are imaged and recorded. The third framework is the execution by the buyer, sales agent and/or custodian/safekeeper of a roles and responsibility agreement. “Sticks” refers to a legal agreement executed on line that delineates a legal and contractual engagement of an independent third party (e.g., the custodian/safekeeper) thereby clearly segregating the interest of the buyer and seller.
These and other features and advantages of the present invention will become apparent from the following detailed description of illustrative embodiments, which is to be read in connection with the accompanying drawings.